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In: Economics

The market demand of a duopoly market is given by the equation: P = a –...

  1. The market demand of a duopoly market is given by the equation: P = a – Q. The total costs of the two firms are TC1 = cq1, TC2 = cq2 .
  1. Solve for the Cournot-Nash Equilibrium using “double-the-slope” rule. Draw the reaction curves of the two firms.
  2. Find the output and price for monopoly and perfect competition. Label these outputs on the graph of reaction curves.
  3. Compare the outputs and prices from part a and part b.

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Expert Solution

Rahul Sunny answered 1 year ago
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